Konferenzbeitrag

Environmental Pollution & the Political Economy of Public Debt

This paper analyzes the political economy of government debt when elected politicians decide about the distribution of public funds between a clean and a polluting public good. When provision of the polluting good creates a stock of climate externalities, strategic incentives for the incumbent government arise from both a budget and emission interaction. In this framework, reelection uncertainty leads to inefficiently low public savings (or even debt) which are attenuated by the emission interaction, while first period pollution decreases regardless of the future government's identity. If the incumbent government competes for office against an environmentalists' party, the total welfare loss from emissions also decreases as a direct result of reelection uncertainty.

Language
Englisch

Bibliographic citation
Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2020: Gender Economics

Classification
Wirtschaft
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Public Goods
National Debt; Debt Management; Sovereign Debt
Climate; Natural Disasters and Their Management; Global Warming
Environmental Economics: Government Policy
Subject
emission externality
public debt
political economy

Event
Geistige Schöpfung
(who)
Kellner, Maximilian
Event
Veröffentlichung
(who)
ZBW - Leibniz Information Centre for Economics
(where)
Kiel, Hamburg
(when)
2020

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Konferenzbeitrag

Associated

  • Kellner, Maximilian
  • ZBW - Leibniz Information Centre for Economics

Time of origin

  • 2020

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